Canada to match U.S. tariffs on Chinese EVs: sources
Canada will match American tariffs on Chinese-made electric vehicles and on heavily subsidized Chinese steel and aluminum imports, the Star has learned.
Prime Minister Justin Trudeau will announce the new tariffs at a news conference Monday morning.
According to sources who were not authorized to speak publicly before the announcement, Canada’s tariffs on Chinese EVs will match the U.S. level, which quadrupled in May, at 100 percent.
Ottawa also will move to match the U.S. with a 25-per-cent tariff on Chinese-made steel and aluminum imports, the sources said.
But the Liberal government is not expected to put further tariffs on other goods like semiconductors and solar cells, as Washington has done. Further public consultations on those are required, one official told the Star.
The announcement comes a day after a top advisor to U.S. President Joe Biden urged Canada to join the Americans and EU in imposing penalties on cheap Chinese state-subsidized products flooding global markets.
U.S. national security advisor Jake Sullivan encouraged Canada to consider Chinese EVs as not just an economic threat but as a national security concern.
“Canada will make its own determinations, but the U.S. does believe that a united front, a coordinated approach on these issues benefits all of us,” Sullivan said.
Sullivan spoke to reporters Sunday evening in Nova Scotia where he met with Trudeau and his cabinet — a surprise visit at the Liberal retreat — and ahead of a high-level visit Sullivan makes this week to Beijing.
Sullivan said the U.S. sees “two distinct challenges” connected with Chinese EVs: “massive subsidies going into the Chinese electric vehicle industry have eliminated a level playing field, and so part of the economic response the U.S. has taken is responding to that.”
“And then there are issues associated with data security, with critical infrastructure, and with the underlying questions of national security associated with connected vehicles, electric vehicles,” he said.
Biden’s advisor noted that the EU has also hiked tariffs on Chinese EVs, and the G7 has made strong statements in support of the U.S. view.
Sullivan said he would share details of American concerns with the Trudeau cabinet “behind closed doors,” but said “it’s not for the for the U.S. to try to dictate” another country’s policy choices.
In May, the Biden Administration U.S. quadrupled American tariffs on Chinese-made EVS to 100 per cent, blaming unfair Chinese government subsidies to Chinese automakers for “overcapacity.” At the time, Biden also announced raised tariffs on other products including solar cells, computer chips, medical equipment and lithium batteries, and the Administration encouraged Canada to follow suit.
Sullivan is now en route to Beijing to meet with China’s foreign affairs minister Wang Yi, one of a series of high-level meetings that the White House said is key to managing an “intensely competitive relationship” and keep it from “veering into conflict.”
Earlier in the summer the Liberal government wrapped up a 30-day public consultation on potential EV tariffs.
However, many observers expected it was only a matter of time before Ottawa matched Washington’s action, especially after Deputy Prime Minister Chrystia Freeland said in June that Canada would not become “a dumping ground” for cheap, mass-produced Chinese EVs.
Conservative Leader Pierre Poilievre and Premier Doug Ford have both called on Ottawa to slap heavy surtaxes on Chinese EV exports in an effort to protect the nascent EV industry domestically.
Even after Ottawa concluded consultations on EVs, on Aug. 9, the Liberal government launched a broader economic security consultation on supply chain disruptions, rising protectionism and unfair trade practices — which one government source acknowledged is aimed at determining how Canada should confront China on a range of issues which are core to Canadian national security concerns.
Sullivan met with Prime Minister Justin Trudeau here Sunday and later briefed cabinet ministers at a dinner that kicked off the two-and-a-half day retreat focused mainly on domestic economic issues, although Canada-U.S. relations are on the agenda for the last day.
Answering a handful of Canadian media questions before his meeting, Sullivan said he welcomed the chance to speak to the prime minister and his governing team, saying they shared “a common vision for what the world should look like and can look like if like-minded countries work together for peace, stability and progress.”
He hailed the strength of the U.S.-Canada bilateral relationship on a range of national security priorities, including the climate crisis, Ukraine, and he said the U.S. welcomed Canada’s commitment to increase its defence spending budget to two per cent of GDP by the end of
Asked if he wanted that increased faster, Sullivan said Canada had taken a “historic step … and then, of course, with all countries, we’d like to see that two-per-cent target get hit as soon as is humanly possible.”
This week’s cabinet meetings will see the Liberals looking at ways to advance their priorities for the fall and the months ahead, particularly housing and economic supports for the middle class, as well as examining how to shore up political support in Atlantic Canada.
Ministers will hear briefings by economic and housing policy experts, current and former mayors, along with the current and former Canadian ambassadors in Washington.
Earlier Sunday, Housing Minister Sean Fraser and Public Works Minister Jean-Yves Duclos released details of a plan to free up federal lands and buildings for private sector housing developments as the government puts a big push on trying to implement many of its promises in the final year before an election is expected.
The Conservatives are pressing hard on the Liberals’ failure to deliver on promises, and in a statement Sunday housing critic Scott Aitchison dismissed the announcement, saying, “By their own admission, it will take years more to actually build anything on these proposed federal communes.”
This article was first reported by The Star
